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How to avoid IR35 - an updated guide for contractors

A leading adviser on employment status has updated her exclusive guidance for ContractorUK on how contractors can avoid IR35, in light of recent administrative and statutory reforms to the ‘deemed employment’ legislation.

Kate Cottrell, of status advisers Bauer & Cottrell, says that although the Intermediaries legislation of 1999 still seeks to tax ‘disguised employment’ at a similar rate to employment, the IR35 landscape for contractors has evolved in three ways.

Cottrell, a former Revenue inspector reflected: “Also since May of last year, there are three new HMRC IR35 specialist teams; a large increase in IR35 investigations and an improved IR35 helpline service.”

But what remains the same are the steps she recommends contractors take to mitigate their exposure to IR35. These include acting like a business, collecting ‘badges of business’ and reviewing written contracts to ensure they reflect the working reality.

“There is lots of IR35 help, advice and support freely available, so take it and do not listen to those who just say ignore IR35,” the advisor warns. “The risks are too great.”